Michihiro Sasaki, senior vice president of Square Enix, spoke with the Financial Times newspaper at the Tokyo Game Show and highlighted the company’s need to find a partner to help it take a bigger stake in the U.S. and European markets. He said:

We need to seek co-operation with a U.S. publisher–we need local content … Our strength is in role-playing games and fantasy titles, so it is a bit difficult to appeal to the U.S. market.

Surprisingly, even with the success of its major global brand, Final Fantasy, Square Enix as a whole only makes about 20% of its revenue outside of the Japanese market. Given that Japan is not seeing any real growth in the gaming sector, Square Enix wants to focus more on Western markets, with the goal of having 50% of its revenue coming from outside its home country. Besides looking West, Square Enix is also focusing more on online games and producing more games for Nintendo’s platforms, which are the current market leaders in both the handheld and console markets.

Capcom started looking to the Western markets for increased revenue a few years ago, and you can see how that move has benefited both Capcom and gamers. Lost Planet, Resident Evil 4, and Dead Rising all appealed more to the U.S. and European markets and have spurred huge sales for the company.

Now Square Enix needs to do the same, and the company needs to leverage its popular IP into new games that appeal to more than just the niche RPG market. I’m not sure what form a new partner would take, however. Square Enix’s strength lies in its IP, and it is unlikely the company would want to release that IP to a Western developer for the creation of a new game. Alternatively, the company could seek to take on new Western games and distribute them under the Square Enix brand.